Dubai gold prices jump, 24K trades at Dh221.25 per gram

Dubai - US Federal Reserve Chair Jeremy Powell said the price increases are transitory.

Gold prices in Dubai rose at the opening of the market on Thursday morning, with 24K trading at Dh221.25 per gram.

The Dubai Gold and Jewellery Group data showed 24K price jumping nearly two dirhams per gram from Dh219.5 on Wednesday morning to Dh221.25 on Thursday.

While 22K, 21K and 18K were trading at Dh207.75, Dh198.25, and Dh170.0 per gram, respectively.

Globally, spot gold was nearly stable at $1,827.01 per ounce, up 0.03 per cent at 9:30am UAE time.

At the beginning of his two-day testimony before the Congress, the US Federal Reserve Chair Jeremy Powell signalled powerful support for economic recovery.

He said the price increases are transitory and the Fed expects to continue its bond buying until there is “substantial further progress” on jobs, with interest rates pinned near zero likely until at least 2023.

Daniel Hynes, ANZ analyst, said rising inflation is going to keep investors on edge but they are becoming more comfortable about the Fed’s stance, allowing them to continue to build positions in the market.

“The conditions are relatively supportive of further gains (in gold)... It’s not going to be a sprint but a very gentle, gradual trend higher for the year at the moment,” Hynes told Reuters.

Ipek Ozkardeskaya, senior analyst at Swissquote, said, in theory, gold is a good hedge against inflation, but the precious metal has been sputtering lately despite super-low US yields and a meaningful rise in inflation.

“Return on risk is too appetising for investors to remain seated on gold given the actual market environment. Therefore, an eventual surge in gold prices could remain capped approaching the 200-day moving average, near $1826 per ounce,” he said.

• Dubai